The advantage of running a small business comes with the understanding that you are small enough to be flexible and as such run on minimal processes. You focus on the quality of your business offering vs. the multiple, bureaucratic systems that larger enterprises run on. This doesn’t mean however that you run in the midst of chaos, some systems such as invoicing and other basic paperwork are essential so that you can keep track of your expenditure and income.
Here are a few tips on how to have a smoother invoicing system so that you can maintain your flexibility and still be organized:
Ensure that your invoices come with all your terms and clauses already printed into your invoice template. Design a simple one on MSWord and input specific details from invoice to invoice. If you want an advance payment for instance, ensure that you state it clearly in writing to avoid any confusion. Small businesses also can’t afford to give out large credit periods so having the terms clearly mentioned in your invoice will ensure that payments also come in on time.
Ensure that you offer a breakdown of all the elements a client or customer would be paying for instead of having a lump sum mentioned in your invoices. An itemized invoice ensures transparency and lets the buyer know exactly where his or her money is going.
Simplified Payment Systems
Having a cash or cheque only payment policy is not adequate in today’s evolved market. While it is not possible for a small business to invest in the high costs of a credit card machine, look for platforms that allow you to convert your smartphone or tablet into a mobile credit card reader or ones that allow online payments at a fraction of the cost.
It might be good to set out a day of the week in which you take stock of your outstanding payments and release a round of emails or make a round of calls for collections. You need to be able to address late payments quickly so that you have a regular cash flow to keep your business running smoothly.
Instead of sending your clients a large invoice with multiple items, it may also be better to look into sending them more invoices with smaller amounts periodically so as to not overwhelm them. This will also ensure that payments are timelier because they are processing smaller amounts at a time.